LIMITATION: WHAT'S THE POSITION WHEN THE DEFENDANTS WON'T TELL YOU WHO THEY ARE?

This post looks at the issue raised in Parkin –v- Alba Proteins Ltd where a party failed to disclose the identity/ existence of additional defendants prior to the issue of proceedings.

In Parkin –v- Alba Proteins Ltd [2013] EWHC 2036 (QB) Holroyde J had to address an interesting question in relation to limitation. What is the position where, despite requests, a solicitor fails to disclose details of a potential defendant and later takes a point in relation to limitation when an attempt is made to join that party into litigation?

THE FACTS

Parkin was a cause where the claimants were bringing an action in nuisance against the operators of a rendering site. Proceedings were issued in December 2010 against one defendant. In October 2012 two further defendants were added without prejudice to the new defendants’ right to take points in relation to limitation. The original defendant had pleaded that it was not operating the site on key dates. The matter was then set down for a preliminary hearing on limitation.

THE ENQUIRIES MADE PRIOR TO ISSUE

The claimants’ solicitors originally wrote in September 2009 stating that they believe the appropriate defendant was Alba proteins. The letter stated “Please confirm this is correct and confirm an address for service”.

There was no reply to that letter. This became a pattern. The judge noted “… it is a regrettable feature of the evidence that letters sent by C’s solicitors have frequently received no reply.”

There was a series of letters in which Alba denied liability. However it never stated when it began to operate on the site. An application for pre-action disclosure made it clear that a claim was being made for damages arising in 2005 and there was concern about the limitation period.

In pre-action correspondence solicitors for Alba did not mention that there had ever been a change of operators on the site. Alba appointed solicitors who wrote a letter in reply. The judge stated, in relation to the defendant’s letter “On an objective reading, the letter as a whole appeared to be written on the basis that D2 [Alba] had been the sole operator throughout the period of the proposed claim.”

The claimant sought a limitation amnesty which was refused. Solicitors for Alba continued to correspond. That correspondence did not indicate that any other party was ever liable for the site.

THE LIMITATION ISSUE

When a defence was filed Alba denied that it was liable for the site for an extensive part of the period the nuisance was alleged. The Defence was described as “coy” by the claimant (and the judge agreed). The Defence did not state who operated the site for the site during the other periods. The claimant again asked for clarification of who operated the sites. Again there was a history of no reply being given to correspondence.

THE APPLICATION AND THE ISSUE OF LIMITATION

The claimants applied to amend the claim to join in the additional operators of the site. The new defendants issued an application for a declaration that the claim against them was statute barred.

THE CLAIMANTS’ ARGUMENTS

The claimants put forward three arguments:

1. That Alba was estopped from arguing that it was not responsible. That argument

was rejected.

2. That there had been concealment.

3. That an order should be made under CPR Part 35 allowing the additional of a new

party.

The second two arguments succeeded.

CONCEALMENT

The relevant section is 32(1)(b) of the Limitation Act 1980.

“32. Postponement of limitation period in case of fraud, concealment or mistake.

(1) Subject to [subsections (3) and (4A)] below, where in the case of any action

for which a period of limitation is prescribed by this Act, either

(a) the action is based upon the fraud of the defendant; or

(b) any fact relevant to the plaintiff’s right of action has been deliberately

concealed from him by the defendant; or

(c) the action is for relief from the consequences of a mistake;

the period of limitation shall not begin to run until the plaintiff has

discovered the fraud, concealment or mistake (as the case may be) or

could with reasonable diligence have discovered it.

References in this subsection to the defendant include references to the

defendant’s agent and to any person through whom the defendant

claims and his agent. …”

Concealment can include non-disclosure as well as active concealment.

The Judge considered the actions of the Defendants and the Overriding objective. The defendants were associated companies. His view was that the strategy of Alba had been to protect fellow companies.

“95. In those circumstances I am driven to the conclusion that D2 deliberately concealed an obviously relevant fact from Cs and from the court.

96. Did D2 do so for its own purposes, or as agent of its sister company D1? On the balance of probabilities, the inference which I draw is that it acted for the benefit, and as agent, of D1. It is not, in my view, mere coincidence that the beneficiary of D2‘s concealment of a material fact was a company in the same group. If D1 and D2 had been commercial rivals, it is in my view unthinkable that D2 would have conducted itself as it in fact did”

CPR PART 35

The Judge held that the amendment should be allowed under CPR Part 35 and CPR 19(5).

“111. As to the exercise of my discretion, I bear very much in mind that the court should not lightly make an amendment which has the effect of depriving a party of a limitation defence. However, for reasons which are apparent in my ruling on the issue as to concealment of a material fact, I think it entirely clear that the amendment is consistent with the overriding objective of dealing with the case justly.”

SUMMARY: A LITIGANT IS UNLIKELY TO SUCCEED BY BEING COY

This cases illustrates the important, and potential width, of section 32 of the Limitation Act and CPR Part 35. The judge was clearly unwilling to allow the defendants to benefit from their own “coyness” which he felt were a deliberate attempt to conceal important matters.

It serves as a salutary reminder of the importance of openness in litigation. There is a duty on the parties to help the court further the Overriding Objective. The Pre- Action Practice Directions and Protocols also encourage a “cards on the table” approach.